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News Article Comments : Fit to be tied?
If the tie goes, the cake will simply have to be cut in a different way, says Clive Williams
Dave Law’s comments (Your Say, MA, 7 August 2008) on my article (That’ll be the day, MA, 24 July 2008) miss the point I was making.
When referring to reviewing rent, I did not imply that a comprehensive rent review would take place. I said that the net income the pubco/brewer would lose as a result of the tie going would need to be put on rent. This is not the same as reviewing the total business opportunity of the pub for rent purposes.
I said: “Pubcos and brewers will need to replace the income lost from tied volumes, and this, quite obviously, will have to go on rent.”
I went on to say that the gross rental increase required (ie, less the overheads saved on the business development managers and any other staff who would lose their jobs if the tie went) would likely be in the region of £36k. Incidentally, if the total business opportunity of the pub was taken into account in recalculat
30 Posts(s) found for this thread: Now displaying page 1 of 3
| Author Name | Opinion | Reply |
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David Law 02/09/2008 09:54:50  |
So your answer to my question is no Clive you still haven't convinced me. The Tie is not justifyable in todays world. Can you please expand more on why you think it is? The only element in your article that I see you ackknowledged is that letting PubCos be created in the first place was a bad idea. I don't beleive that all suppliers will simply use a telephone, even though the vast majority of sales people on the planet do. It certainly isn't justifyable to claim that assosiated costs will have to go up with the tenant footing the bill, those sales teams are already out there as are price comparison websites, and even if they do go up it will be reflected in the GP and therefore the divisible profit will have to come down to reflect that cost. I can't speak for Fair Pint but I think that what they are attempting is admirable. My guess is the reason they are gunning for the tie is that it is the only way to ensure PubCos act in a manner that befits their FTSE status. This post replies to this thread |
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martin kay 02/09/2008 10:41:15 |
I thought Clive would know better. It's tempting to correct his asertions on how rent would be reviewed, but this has been well covered elsewhere before. Dealing with his assertion that all contracts will need to be renegotiated from scratch and tenants cannot drop out the bits they like, then this is simply wrong. The tie is one of many obligations of the agreement that the tenant is obliged to follow. If the agreement allows (and most do) the landlord to unilaterally release this obligation there would usually also be the right have a financial review. This would generally be a interim open market rent review, although it is not inconceivable that some leases may specify another form of recompense. In the absence of any such mechanisms, then the tie obligation simply becomes unenforceable by law, and that is the end of the matter; no renegotiations required at all. The next cyclical review would of course reflect FOT profitability as would the interim review mentionned above. Sorry Clive, but totally misleading and inaccurate comments from you. edited by: martin kay at: 02/09/2008 10:41:31 This post replies to this thread |
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J Mark Dodds 02/09/2008 10:48:51 |
Excellent post Martin. Clive Williams is adept at plucking figures, givens and suppositions to support his position from thin air and bandying them around as if they are facts buried in stone. This is a tack familiar to anyone who's experienced a tied pub rent review and PubCos have had it their way for so long they just cannot get their heads around the fact that things are changing. The tie is going... The C.E.O s and other officers of the PubCos have had it so easy for so long they can't in a month of Sundays envisage a situation where they can't simply make a decision about how they will organise the basic finances of tenants in favour of the freeholders' feifdom and have it even questioned let alone thrown out and overturned by justly aggrieved people who have been comprehensively fleeced by their feudal landlords for a couple of decades. Well, this time the villagers serfs and bumpkins have had enough and got themselves a lot better organised. They aren't going to carry on having their tithe taken without reciprocal benefits. edited by: J Mark Dodds at: 02/09/2008 10:49:47 This post replies to this thread |
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| Gilbert Bank 02/09/2008 16:34:02 |
So there you are. BDMs are simply tie enforcement officers as we all knew. Why is their no place for a business development manager in a world without tie? How are they going to develop their business? The premise behind the tie is a big fat lie. If a brewer sells his beer to his tenant at a higher price than his tenants free of tie competitor then the only winner is the FOT trader who is able to price his ale just below his tied competitor. How can this be in the interest of the consumer? It is essentially a method of price fixing and is surely illegal. This is why the alright jack freehouse boys are very jittery. If the tie goes, so does the comfy cartel like arrangement that fixes the price high for the consumer that suits the brewers and pubcos down to the ground. This post replies to this thread |
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| Nigel Wakefield 02/09/2008 18:20:37 |
Lessees are struggling to pay rents that bear very little relationship to the viability of the pub, the tie is extended at the slightest whiff of trouble to include as much as possible. Yet we have so called knowledgable people saying that the Pub Co's will need compensating for the loss of the tie. These companies have raised rents far beyond normal commercial property standards, milked the tie to the extreme, given absolutely nothing of any consequence to help people in trouble. Lessees are classed as expendable and not an essential commodity by certain companies, the only essential is enough money and ignorance to be milked for eighteen months and then have their pubs repossessed, send this guy out with me for a week then write an article, even better go and help the Welfare Section of the Licensed Trade Charity and see what is really happening on the ground. This post replies to this thread |
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| martin kay 02/09/2008 18:38:33 |
Enforcement only if there is something to be enforced, ie develop business with willing partners as oppossed to cheats who breach a contract. Without the tie, you are correct, these Co's become property companies who will likely be bought by a property company who will have little interest in tea and sympathy. See Wellington. It is said "illegal"; which law? This post replies to Gilbert Bank > Fit to be tied? |
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| kevin o'connor 03/09/2008 09:36:39 |
I'm not jittery. Cannot speak for Tim Martin but I would be suprised if he was. This post replies to Gilbert Bank > Fit to be tied? |
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| Vic Thompson 03/09/2008 10:32:07 |
The content of this post is currently under review |
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| Gilbert Bank 03/09/2008 16:00:13 |
Martin, price fixing is illegal. When a BDM's sole input into our "partnership" is to check barcodes I feel cheated. edited by: Gilbert Bank at: 03/09/2008 16:17:22 This post replies to this thread |
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| Gilbert Bank 03/09/2008 16:20:52 |
Really Kevin? Well think of this. If the tie was gone and the cake was being re-divided how are they going to recoup their share? It can't get any worse for the nil discount tied houses can it? But the free house on big discounts looks very vulnerable to me as a natural balance would be restored. My prices would go down as yours go up and we meet somewhere in the middle. This post replies to kevin o'connor > Fit to be tied? |
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